China - Grand Pharmaceutical and Healthcare Holdings Limited ('GP (HK)' or the 'Company', stock code: 00512) is pleased to announce the audited consolidated annual results for the year ended 31 December 2020 of the Company and its subsidiaries.
During the Year, the Group recorded revenue of approximately HK$6,352.9 million, representing a slightly decrease of approximately 3.6% as compared with the corresponding period in 2019. The decrease was mainly derived from the impact of COVID-19 epidemic, certain hospitals were restricted for access during a period of time and temporary suspended provision of non-emergency services, and thus put pressures in the sales of prescription drugs. In the meanwhile, the Group's continuous expansion of the out-of-hospital market and strengthening of cooperation with various e-commerce platforms resulted a substantial growth in the sales of over-the-counter drugs on e-commerce platforms and retail pharmacies, which offset the drop of prescription drugs. The Group's gross profit margin increased 2.2 percentage points to approximately 63.5% as compared with the corresponding period in 2019. In 2020, benefited from the gain from fair value change of investment in Telix, the profit attributable to owners of the Company amounted to approximately HK$1,792.7 million, with a significant increase of approximately 55.8% as compared with the corresponding period in 2019. If disregarding the gain from fair value change of investment in Telix, the profit attributable to the owners of the Company amounted to approximately 1,524.4 million, increased by approximately 32.5% as compared to the same period of last year. The Board proposed a final dividend of 11 HK cents per share.
Product Performance
Pharmaceutical Preparations and Medical Devices
Pharmaceutical products and medical devices are currently the major sources of profit contribution of the Group. Major products include respiratory, ophthalmic and ENT medicines, cerebro-cardiovascular emergency medicines and medical devices. In 2020, the revenue from pharmaceutical products and medical devices was approximately RMB3,632.7 million, representing a decrease of approximately 3.5% as compared with the corresponding period in 2019. The revenue from respiratory, ophthalmic and ENT medicines and devices was approximately RMB1,939.7 million, representing a decrease of approximately 11.0% as compared with the corresponding period in 2019, which was mainly due to a certain degree of impact during the epidemic on the sales of respiratory and ENT products, in particular prescription drugs, and decrease in the number of visits for respiratory diseases, of which: (i) In 2020, the revenue from ophthalmic products of the Group was approximately RMB754.6 million, representing an increase of approximately 0.9% as compared with the corresponding period in 2019; (ii) In 2020, the revenue from respiratory and ENT products of the Group was approximately RMB1,185.2 million, representing a decrease of approximately 17.2% as compared with the corresponding period in 2019. Besides, the revenue from the Group's cerebro-cardiovascular medicines was approximately RMB1,326.2 million, representing an increase of approximately 13.5% as compared with the corresponding period in 2019.
Bio-technology Products and Health Products
The bio-technology products and healthcare products of the Group include Taurine, amino acid products, bio-pesticides, bio-feed additives and steroid products, etc. The revenue from bio-technology products and healthcare products in 2020 was approximately RMB1,337.7 million, representing a decrease of approximately 2.5% as compared with the corresponding period in 2019. By virtue of the business expansion strategy of international business and healthcare business, the revenue from the Group's amino acid products was approximately RMB569.9 million, representing an increase of approximately 16.7% as compared with the corresponding period in 2019, and the revenue from products related to bio-pesticides and bio-feed additives also recorded an increase of approximately 10.4%.
Specialized Pharmaceutical Raw Materials and Other Products
Specialized pharmaceutical ingredients and other products are the relatively stable segment among the product segments of the Group. The Group has always been proactively improving technology level and product quality, reforming the product production technology to increase efficiency, and adjusting the product matrix to enhance market competitiveness and improve economic efficiency. However, subject to the overall decline in the pharmaceutical industry owing to the epidemic, the relevant revenue of this segment recorded approximately RMB683.6 million which is similar to those in the same period of last year.
Technological Innovation Planning
The Group is one of the earliest domestic pharmaceutical companies that have performed transformation of technological innovation and internationalization, devoting itself to building a system of innovative R&D and outstanding talents. The Group has formed a unique layout and concept of technological innovation and development via active cooperation with the world-leading pharmaceutical companies, universities and scientific research institutions.
In the field of cerebro-cardiovascular precision intervention, the Group has six innovative products covering three directions, including vascular intervention (coronary artery intervention and peripheral vascular intervention), neurological intervention and structural cardiac disease. Among which, two products for coronary artery and shunt restenosis in arteriovenous fistulas were approved to launch and other products are underway orderly. In the future, the Group will also comprehensively deploy in the fields of electrophysiology and heart failure, striving to build a world-leading cerebro-cardiovascular precision interventional diagnosis platform.
In the field of tumor treatment, the Group currently has 12 products under research, covering 9 tumor indications. Through the product portfolio, the Group expands into internal medicine, surgery, interventional medicine, nuclear medicine and other departments to form a multi-disciplinary synergy so that tumor treatment products can serve patients in different areas and departments. The Group actively explores the development channels and sales channels of tumor products globally and strives to become a leading innovative technology enterprise in the anti-tumor area across the world.
For the anti-virus and anti-infection field, the Group currently has three global innovative drugs with new mechanisms of action in the research pipeline, of which two products are used for the treatment of sepsis and one product is used for the treatment of parainfluenza. The Group's layout in this field is based on the in-depth exploration of unsatisfied clinical needs. The forward-looking layout in respect of sepsis, viral infections and other diseases that pose a major threat to human health not only broadens the product pipeline of the Group, but also increases the comprehensive competitiveness and risk-resistant capability of the Group in the entire industry.
Respiratory, ophthalmic and ENT are the traditional fields of strength of the Group. In order to further strengthen the innovation reserve in this field, consolidate its dominant position in the market and enhance its competitiveness, the Group has deployed three innovative drugs in this field to further improve the product system of this field.
The Group has taken part in four major technology R&D platforms and five major R&D centers around the world. The Group has over 30 prestige scientists worldwide. The global R&D center has begun to take shape, and the globalized R&D planning has gained progressive achievement.
Material investment and M&A
In 2020, the Group carried out multiple material investment, M&A and cooperation projects and continued to implement the development strategy of 'self-development + global expansion', further exploring high-quality innovative projects around the world to expand the Group's product pipeline and enhance the Group's comprehensive strengths, and putting vigorous efforts in transformation towards innovation and internationalization.
In March 2020, the Group entered into a technology transfer agreement with Chongqing AnTi New Bio-technology Limited to obtain the development and commercialization rights of a world-wide first developed new drug APAD for Sepsis. In April 2020, the Group entered into a product licensing agreement with Cloudbreak to obtain an exclusive production (including technology transfer) and commercialization right in the Greater China Region for a worldwide innovative product CBT-001 developed by Cloudbreak, and subscribed for the shares of Cloudbreak Therapeutics LLC ('Cloudbreak Cayman') at the consideration of approximately USD5.63 million, which will represent approximately 7.07% equity interest of the enlarged share capital of Cloudbreak Cayman after it completes the reorganization, further enriching the product pipeline of innovative drugs with high barrier to entry in the ophthalmic sector. In May 2020, the Group entered into an equity investment agreement with eTheRNA to make an equity investment of EUR9 million in eTheRNA Immunotherapies NV ('eTheRNA'), and the Group will obtain approximately 13% of the preferred series B shares of eTheRNA and exclusive strategic cooperation for mRNA platform. The expansion of the mRNA vaccine platform technology may further optimize the Group's planning in the fields of tumor immunotherapy and infectious disease treatment. In June 2020, the Group entered into a subscription agreement to invest in CNCB Grand Healthcare Investment Fund LP, which will be able to share the Group's R&D and financial risks in investments of world's leading pharmaceutical companies and pharmaceutical device manufacturers, while further expanding the scope of development and enhancement of innovative projects.
In July 2020, the Group entered into an equity investment agreement with Shanghai Revolmmune Therapeutics Biotechnology Limited to obtain the licensing cooperation of world-wide innovative Vesicuar Stomatitis Virus product and acquired approximately 9.7% equity interest in the company, which further strengthened the Group's presence in the field of precise intervention therapy and tumor immunology. In July 2020, the Group committed to invest in Nanjing Chuangyi Doyen Equity Investment Partnership (Limited Partnership) ('Nanjing Fund'). Meanwhile, the Group, together with Nanjing Fund and Shanghai Hongsheng Enterprise Management Partnership (Limited Partnership) subscribed and acquired Nanjing Kainite Medical Technology Company Limited by phases, and will obtain medical devices in five areas of neurointervention including the third-generation thrombotic stent and its ancillary products for the treatment of ischemic stroke, and expand its product pipeline in precise intervention treatment and build an integrated platform for the R&D, production and sales of medical devices in cardio-cerebrovascular intervention therapy. In November 2020, the Group invested US$25 million to subscribe approximately 7.6% equity interests of Australia based Telix and obtained the right of exclusive development, manufacturing and commercialization in the Greater China Region for its six innovative first-in-class RDC drugs, helping to promote the Group's expansion in the tumor field, which is conducive to the formation of the Group's comprehensive advantages of international layout, differentiated innovation and professional development in the tumor field. Meanwhile, the Group acquired Puer Weiye to obtain the relevant qualifications for the development, production and trading of various radionuclide-drug conjugates in Mainland China. In November 2020, the Group and eTheRNA will set up a joint venture company AuroRN in Mainland China to build an independent and integrated mRNA technology R&D and production platform to conduct R&D and production of mRNA technology, which further optimizes the Group's strategic planning in tumor immunotherapy and infectious diseases treatment, and may create synergies with existing pipeline product. In December 2020, Sirtex, the Group's associate, entered into transactions and strategic cooperation in the respects of equity investment and collaboration agreements with two US based innovative companies, Nanospectra Biosciences, Inc. and BlackSwan Vascular, Inc., to enrich the Group's highly innovative and high-barrier pipeline.
The Board of China Grand Pharmaceutical and Healthcare Holdings Limited, commented: 'As the COVID-19 pandemic swept the world in 2020, the global economy has been hit hard. In order to better adapt to the epidemic and the new trend of domestic industry changes, the Group adheres to being driven by scientific and technological innovation, increasing investment in global innovative products and advanced technologies, so as to avoid the trend of low price competition of domestic homogenized drugs in the future. Looking ahead, the Group will continue to implement the strategy of 'global expansion and dual-cycle operation' and consolidate its leadership among the industry participants with a strategic forward-looking vision of the world while establishing a firm foothold in the domestic market. It is the target of the Group to gain the recognition of medical practitioners and patients, become one of the leading enterprises in the Chinese pharmaceutical market, and create higher profit value for our shareholders and investors.'
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GRAND PHARMACEUTICAL GROUP LIMITED 
